[비즈한국] U.S. President Donald Trump launched the social media platform 'Truth Social' on 'Presidents' Day' in February 2022, a federal holiday in the United States. After mainstream social media platforms like Twitter and Facebook permanently suspended Trump's accounts citing the spread of misinformation, he mobilized his own media and technology company to restore his online influence. The move was triggered by the unprecedented event in which his supporters forcibly occupied the U.S. Capitol after Trump, having lost the 2020 presidential election, promoted conspiracy theories about a rigged election.
Approaching its third anniversary, Truth Social is shaking off a long dark period following Trump's successful re-election. President Trump is pouring out major statements on Truth Social daily, and the operating company recently announced plans to expand its business into the cryptocurrency sector. Will Truth Social be able to continue its upward momentum?
Truth Social Becomes Trump's 'Mouthpiece'
President Trump's 'Truth Social politics' have become a reality since his return to the White House. On the 29th (local time), President Trump posted a statement and several memorial messages regarding a passenger-helicopter collision and crash near Washington, D.C., on his official Truth Social account. Although the White House press secretary had uploaded the same statement to X (formerly Twitter), Trump chose the platform he created.
Two days earlier, he engaged in a war of nerves with the California state government over water supply policies following a large-scale wildfire. When Trump posted on the platform that "the military intervened with emergency authority to supply ample water to California," the California Department of Water Resources officially refuted the claim, dismissing the suggestion of military mobilization by stating, "The federal water pump, which had been under maintenance for three days, simply resumed operation." Trump has posted 106 'Truths' over the past week, maintaining active social media politics. During the same period, he posted only 5 times on X. President Trump, who had been ousted from Twitter due to an account suspension, had returned to X last August ahead of an interview with Elon Musk.
Truth Social is an SNS similar to X. The way of communicating—such as following others or sending chat messages—is the same as typical social media platforms. Instead, posts where users briefly share their thoughts and situations are called 'Truths.' Sharing another user's post to your own feed is called 'ReTruth' instead of the X term 'Retweet.' From the platform name to specific terminology, Truth Social emphasizes 'truth' and claims to guarantee freedom of political expression through loose content moderation. In its investor relations materials, 'Trump Media & Technology Group (TMTG),' which operates the platform, describes Truth Social as "a safe harbor for free expression amidst increasingly harsh censorship."
Will It Be Trump's 'Wallet' That Never Runs Dry?
Truth Social started as a platform for Trump and his supporters, but it is more than just a communication channel. Currently, most of Trump's net worth comes from Truth Social. Excluding assets tied up in commercial real estate, this platform business accounts for more than half of his wealth.
Trump is the largest shareholder of Truth Social's operating company, 'Trump Media & Technology Group (TMTG).' TMTG struggled after its backdoor listing on the U.S. stock market last March, but its stock price surged following Trump's re-election. According to Forbes, Trump's net worth approached $7 billion (10.17 trillion KRW) before his inauguration. This is an increase of $865 million (1.257 trillion KRW) compared to a month prior, driven by TMTG's stock price rising over 20% in the previous trading session. The stock continues to fluctuate, and analysts note that its price trend is not significantly related to financial status or business performance. TMTG's revenue and net loss in the third quarter of last year were $1 million (1.4 billion KRW) and $19 million (27.5 billion KRW), respectively.
Truth Social, which targets right-leaning users, has clear limitations in becoming a universal platform to replace X or Facebook. In a report released on the 16th, the British digital crime protection firm Netcraft analyzed that crimes such as phishing attacks and investment scams are prevalent on Truth Social due to the expectation that most information on the platform will be accurate, combined with its closed algorithm.
However, the potential for expanding its influence remains open. As it establishes itself as a major messaging channel for the U.S. President during his term, interest and traffic are bound to rise. Some have raised concerns that Truth Social could be used as a lobbying tool for Trump. Since Truth Social's revenue mainly comes from advertising, it is suggested that companies could benefit Trump by placing ads on the platform or purchasing its stock. It is also notable that Trump's close associates are closely linked to Truth Social. Pam Bondi, the nominee for U.S. Attorney General, holds $3 million in TMTG stock, which accounts for one-quarter of her assets.
TMTG is expected to increase its value as a 'meme stock' (stocks that go viral online and attract individual investors) that moves according to Trump-related news. Following Trump's promotion of a 'pro-crypto' stance and the issuance of a 'meme coin' just before his inauguration, TMTG is expanding into fintech. On the 29th, the TMTG board approved the launch of the financial services and fintech brand 'Truth.Fi.' The initial capital of up to 360 billion KRW will be allocated to various investment products, including custom Exchange Traded Funds (ETFs) and virtual assets. CNBC assessed, "This service could become a competitor to Elon Musk, who recently announced a deal between X and Visa for social media expansion." Truth.Fi is scheduled to be launched within the year, pending approval from financial authorities.